Energy

Solar Industry Upset Its Government Subsidies Were Decreased

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Jason Hopkins Immigration and politics reporter
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Michigan supporters of solar energy were left livid after state officials chose to reform the way solar panel owners are compensated for the energy they put back into the grid.

The Michigan Public Service Commission decided on April 18 to replace the state’s net metering system with a new model that changes the way panel owners are paid for excess energy they send back to the grid. The new net-metering program in Michigan will charge customers with solar panels at full retail price for any electricity they consume, while crediting them for power they send back onto the grid at a to-be-determined rate based on costs averted by the utility. The rate at which solar customers are credited can vary. Current net metering customers will be grandfathered in for around another decade.

Typically, net metering allows for customers to sell their excess energy back to the grid, where utility companies must purchase their power — regardless if they need it or not — at retail rates, not whole rates. Such a system allows for owners of solar installations to financially benefit, but non-net metering customers are ultimately footing the bill as costs are shifted to them through higher electricity bills.

The issue was examined by the state legislature in their 2016 session, and the Michigan Public Service Commission began examining options last year. While the new distributed generation billing plan will ultimately save money for the vast majority of electricity consumers who don’t own a solar panel, the reforms were met with derision from solar energy supporters.

“We are disappointed in the Commission’s decision to eliminate Michigan’s net-metering policy. This decision will restrict homeowners’ ability to invest in rooftop solar and threatens to destabilize Michigan’s solar industry, putting thousands of jobs at risk,” said Amy Heart, a spokeswoman for The Alliance for Solar Choice, said in an mlive.com report published Tuesday. “The solar industry will be looking at all options to fix this short-sighted decision, including legislative solutions.”

The decision also faced bipartisan pushback in the state legislature.

“The recent order by the Michigan Public Service Commission will slap Michiganders who want to use rooftop solar with unfair rates for the clean energy they generate, which will make investing in rooftop solar unaffordable for many Michigan families,” stated state Democratic Rep. Yousef Rabhi in the same local report.

Nevertheless, Michigan is not the only state taking a closer look at how solar panel owners are compensated. The largest utility company in Montana discovered it was overpaying net metering customers by about three times the market value. The governor of New Hampshire, in a call for sweeping changes to his state’s energy industry, decried the use of solar subsidies that have artificially supported unprofitable renewable energy companies.

Legislators in Michigan plan to hold a hearing on May 8 to further debate the subject.

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